MPSC 2024 Prelims Paper-I · Question 43 of 100

Correct — option (1), Only (a). Gunnar Myrdal (the paper prints the name 'Gunnar Mirdal'; the usual spelling is Myrdal) explained regional inequality by circular and cumulative causation: once one region pulls ahead, the advantage feeds on itself instead of correcting itself, because two opposing forces run between the growing region and the lagging one. The backwash effects — the paper calls them backward effects — run from the poor region to the rich: young and skilled workers migrate out, savings and capital follow the higher returns, the better traders and the better goods concentrate in the centre, and the lagging region is left with a thinner labour force, less capital and a weaker market. The spread effects run the other way: the expanding centre buys raw materials and food from the periphery, subcontracts work to it, and diffuses technique and skill outward, so that growth radiates from the centre into the region around it. Myrdal's whole argument is that in a poor country the backwash effects are the stronger of the two, so that a free market left to itself widens regional inequality rather than closing it, and equilibrium never arrives. From that follows the role of the state described in statement (a): government must deliberately strengthen and extend the spread effects while neutralising the backwash effects — through transport and communication that carry the centre's growth outward, through investment steered to the lagging region, and through the provision of health, education and credit that would otherwise drain away. Only statement (a) states that pair of tasks in the right direction, and only option (1) offers statement (a) on its own.

• (2)(a) and (c) — This keeps statement (a) but adds statement (c), 'Effecting spread effect and backward effect', and the two cannot both be government policy because they contradict one another on the backwash effect: statement (a) asks the state to neutralise it while statement (c) asks the state to strengthen it. Strengthening the backwash effect means actively helping capital, skilled labour and trade drain out of the poor region into the rich one — the opposite of what any regional policy is for, and precisely the outcome Myrdal argued the unregulated market already produces. Adding a statement that undoes the one beside it cannot be the prescription.
• (3)(b) and (c) — This pairs statement (b) with statement (c). Statement (b) is the exact inversion of Myrdal's prescription: it would neutralise the spread effect — the force that carries growth outward from the centre — by strengthening the backwash effect that drains the periphery. Applied as policy that is a recipe for concentrating all development in a few already-rich pockets and hollowing out the rest, which is the disease in Myrdal's account rather than the cure. Statement (c) then compounds the error by asking the state to strengthen the backwash effect a second time.
• (4)(c) and (d) — This pairs statements (c) and (d), which flatly contradict each other — statement (c) asks the state to strengthen both effects, statement (d) asks it to neutralise both — so they cannot describe a single policy. Statement (d) is also wrong on its own terms even though it correctly wants the backwash effect suppressed: neutralising the spread effect as well would switch off the mechanism by which growth in the leading region reaches the lagging one at all, leaving the poor region with neither its own momentum nor any benefit from the centre's. Myrdal wanted one force damped and the other amplified, not both damped.

Myrdal's principle of circular and cumulative causation was framed against the neoclassical expectation that regional differences are self-correcting — that capital will flow to where it is scarce and labour to where it is dear, until returns even out. Myrdal argued the opposite: an initial advantage sets in motion changes that reinforce it, so the system moves away from equilibrium rather than towards it. Between regions this works through the two named forces. Backwash effects transfer the mobile resources of the lagging region to the leading one: labour migration selects the young and the skilled, banks lend where returns are highest, and competition from the centre's industry can destroy local crafts. Spread effects work in the other direction, as the growing centre creates demand for the periphery's food, raw materials and labour and diffuses technique outward. In rich countries with dense infrastructure and strong public policy, spread effects are relatively powerful; in poor countries they are weak, backwash dominates, and inequality between regions widens with growth. The policy conclusion is therefore not laissez-faire but an interventionist state that tilts the balance between the two forces. Albert Hirschman described the same pair of forces with different names — trickling-down and polarisation — but read the balance more optimistically.

MPSC's development-economics questions favour the theorists whose vocabulary has entered Indian planning debate, and Myrdal is central to that vocabulary because regional imbalance is a permanent theme of Indian and Maharashtrian policy — the reason backward-area boards, special component plans and regional development statutes exist at all. Questions on him usually turn on a pair of paired terms, and the risk is that a candidate who recognises 'spread' and 'backwash' still fumbles which one the state is meant to strengthen. The reliable anchor is the meaning of the two words rather than their memorised pairing: spread carries growth outward and is therefore to be encouraged, backwash drains the periphery and is therefore to be countered. This item is built entirely on that direction, with three of the four statements simply permuting it.

• Gunnar Myrdal (1898-1987), the Swedish economist who shared the 1974 Nobel Memorial Prize in Economics, developed the principle of circular and cumulative causation, in which an initial advantage or disadvantage reinforces itself instead of being corrected by market forces.
• Backwash effects run from the lagging region to the growing one — migration of young and skilled labour, movement of savings and capital toward higher returns, and the displacement of local production by the centre's goods.
• Spread effects run from the growing region outward — demand for the periphery's food, raw materials and labour, subcontracting, and the diffusion of technique and skill into the surrounding area.
• Myrdal held that in underdeveloped economies backwash effects dominate spread effects, so unregulated growth widens regional inequality; state intervention is required to reinforce spread and counteract backwash.
• His principal works include Economic Theory and Underdeveloped Regions (1957), Asian Drama: An Inquiry into the Poverty of Nations (1968) and The Challenge of World Poverty (1970), the last of which also carries his 'soft state' argument about weak policy implementation in South Asia.

• Reversing the two forces and supposing the state should encourage the backwash effect, which is the single most common way this question is lost
• Treating spread and backwash as descriptions of good and bad regions rather than of flows running in opposite directions between them
• Selecting a combination in which the two chosen statements contradict each other, which two of the wrong choices here do
• Confusing Myrdal's terms with Hirschman's — the ideas are close cousins, but polarisation and trickling-down belong to Hirschman

Development theorists appear in MPSC papers as attribution questions — who said this, whose concept is this — and as prescription questions of the kind set here, where the concept is known but its direction has to be applied. Myrdal, Hirschman, Nurkse, Rosenstein-Rodan, Rostow and Lewis form the recurring group, each attached to one or two signature term-pairs. The most efficient preparation is a short table of theorist, signature concept, paired terms and policy conclusion, because the examiner tests the pairing rather than the argument in full. Watch also for the Commission's habit of printing a foreign economist's name in an unusual transliteration, which should not throw a candidate off the concept.

No directly related past PYQ was found.

• practice — not a real PYQ

  In Gunnar Myrdal's analysis of regional inequality, the migration of young and skilled workers and the movement of capital from a lagging region to a growing one is an example of which effect ?

  • (a)Spread effect
  • (b)Backwash effect
  • (c)Multiplier effect
  • (d)Demonstration effect

  Answer(b) Backwash effect — the flow of mobile resources out of the lagging region and into the growing one, which is why Myrdal held that unregulated growth widens regional inequality. The spread effect runs the other way, carrying demand and technique outward from the centre; the multiplier and demonstration effects belong to different arguments altogether.

• practice — not a real PYQ

  The concepts of 'polarisation' and 'trickling-down' effects, which closely parallel Myrdal's backwash and spread effects, are associated with which economist ?

  • (a)Ragnar Nurkse
  • (b)Albert O. Hirschman
  • (c)W. Arthur Lewis
  • (d)Paul Rosenstein-Rodan

  Answer(b) Albert O. Hirschman — his Strategy of Economic Development pairs polarisation, which drains the lagging region, with trickling-down, which carries growth outward, and he read the eventual balance between them more optimistically than Myrdal did. Nurkse is associated with balanced growth and the vicious circle of poverty, Lewis with the dual-sector model and Rosenstein-Rodan with the big push.